CCUR is about to explode this afternoon! It was just announced that Ericsson (ERIC) is buying Microsoft (MSFT)'s Mediaroom IPTV multi-screen business, which allows pay-TV companies to deliver streams of live TV and on demand content to tablets, smartphones, and other mobile devices. ERIC is paying just under $200mm for Mediaroom, which has clients like AT&T Uverse and a total reach of 11mm homes. ERIC's purchase of Mediaroom will instantly give ERIC a 25% multi-screen market share, the highest in this space!
CCUR's MediaHawk technology is better than Mediaroom and CCUR is using it to power the multi-screen video delivery platforms of Virgin Media the #1 cable TV company in the UK and Jupiter the #1 cable TV company. CCUR now has a multi-screen reach from Virgin and Jupiter of 6.3mm households or 57% of Mediaroom's reach. If Mediaroom was acquired for just under $200mm, CCUR's MediaHawk is probably worth $100mm, but currently isn't receiving any value!
CCUR at $6.98 per share with 8.72mm o/s has a market cap of $60.87mm with $24.6mm in cash and an enterprise value of $36.27mm. After subtracting $15mm, the price CCUR paid to acquire their Media Data Intelligence business, CCUR is only receiving $21.27mm in total value for their real-time and video solutions businesses!
CCUR's real-time business has been around since 1967 and provides ultra high performance real-time technology for time-critical simulator applications in the defense and automotive industries. It has 4 of the world's 5 largest defense contractors as clients and annualized revenue of $27.6mm. It's at least worth $25 million, leaving zero value for CCUR's video business!
For CCUR to increase in value by $100mm to fairly value its video business, which has $33.89mm in annualized revenue and a 30% share of the video-on-demand (VOD) market, CCUR needs to rise by $11.47 or 164% to $18.45! It could rally to $8 today and break $9 tomorrow!